Tuesday, August 8, 2017

Bankruptcy Bunbury, What is the Deal with Debts?

Exactly what Debts are removed if I go Bankrupt?

The quick answer is that when it comes to Bankruptcy most debts are wiped, and I have featured a chart below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) as well as any debts arising from uninsured Motor-vehicle claims and educational debts for example, HECS or FEE-HELP. These debts are not erased when you file for bankruptcy.

What about Secured Debts?
A secured debt is a car loan or a home loan; it is a debt that has some definite security connected to it. So as an example if you buy a new car for $40,000 dollars the security for this car is the actual car itself.

So, can my secured debts be removed if I file for bankruptcy?
Yes. If you have a car loan for $40,000 you can have that debt cleared away if you simply hand back the car. So the lesson is that you cannot have your cake and eat it too (so to speak), so yes all of your secured debts might be wiped but the asset will need to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is necessary to get professional help - like that you can find at Bankruptcy Experts Bunbury.

What about my Tax Debts with the ATO can they be removed If I go bankrupt?
Yes they can, both business and personal debts owing to the ATO can be erased with bankruptcy. If you have a business with any kind of debts get some advice because it is not always so easy. Feel free to call us right here at Bankruptcy Experts Bunbury if you have any type of questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsBunbury.com.au

What about my business or Company debts?

In some cases when it involves Bankruptcy we can help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may need to liquidate a company to deal with the debt that way. When it comes to Bankruptcy, it can be a confusing area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Experts Bunbury we specialise in business and personal debts so give us a call here at Bankruptcy Experts Bunbury if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsBunbury.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be involved and difficult to understand. A question we commonly get asked here at Bankruptcy Experts Bunbury is 'what happens to my super if I apply for Bankruptcy'? The reply for most is easy, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then very little happens; your super is 100 % safe when it involves Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, take into account the expanding number of members of Self-Managed Super Funds ("SMSFs") in recent years; the ATO tells us it has grown Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes down to Bankruptcy?

Remember Bankruptcy Experts Bunbury is not indicating this short article is the whole story, if you have any questions feel free to consult with us on 1300 795 575. Whether or not you call us or another person it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we encourage you ask for both legal and financial advice before proceeding with any of the actions recommended in this article.

What is a Disqualified Person?

First and foremost, if you are taking into account Bankruptcy, you can not be a part of a SMSF. Why? Because if you are coping with bankruptcy, you will be classified as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means the two of these members will need to also be the individual trustees. The duty of trustee sets a lot of legal rules, and if you are in this role I would highly urge you to end up being familiar with them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can notice how an individual bankruptcy can be very destructive to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have to restructure my SMSF Fund after I'm bankrupt?

So what develops if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will need to be reorganized. This means that you will have to consider your overall structure and ensure that it is meeting the basic conditions, including things like having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And bear in mind, sometimes the absolute best plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale reorganizing issues, there is a lot of paperwork to deal with too, and you need to be continuously keeping the ATO informed of what is happening. This means you have to let them know that you have a bankruptcy problem with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they must also notify ASIC of their resignation.

In the course of that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are unsure call Bankruptcy Experts Bunbury for some free advice on 1300 795 575.

What if I use a single member fund?

If you are a single member fund, then you will have to appoint a new director, and it will then end up being their responsibility to oversee the sale and relocation of assets into a managed fund. If there are two or more members, than the bankrupt member will need to resign and the other member will take away the property and halve the proceeds. They would then have to decide if they wish to remain as a single member SMSF, or if they intend to roll it all into a managed fund. If both members are entering bankruptcy, then they would definitely need to sell all assets right away and move the liquid assets to the managed fund.

From that you can see how when it comes to Bankruptcy, even though one single member is dealing with issues, it can affect the very existence of an SMSF. If you are at the moment facing this issue yourself, or with a partner in a SMSF, please seek financial advice to make certain you are meeting the ATO requirements.

A simple solution ...

As I suggested earlier, a basic solution to your SMSF problem is to put your super back into a normal regulated managed fund prior to bankruptcy and save yourself all the problems outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your options further, call us at Bankruptcy Experts Bunbury or visit our website: www.bankruptcyexpertsBunbury.com.au or just give us a call on 1300 795 575.

Thursday, January 19, 2017

Bankruptcy in Bunbury - Will I lose my home if I go bankrupt?

Bankruptcy Bunbury is a tricky process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that very little troubles people more than the notion of losing the family home or apartment. Almost everybody is sentimentally connected to their home - it's where the kids have grown, it's where you enjoy life on a day to day basis.

Will you lose your home if you go bankrupt? The solution is a resounding maybe. (not very useful, I know) People typically feel that it's an inevitable consequence and a part of Bankruptcy, and hence push themselves to the brink of insanity to not lose the family home. But when it comes to the whole process of Bankruptcy, a key perk of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've accepted to pay back the debt you are in.

So how is it possible to keep my Bunbury house, you ask? It's easier if I explain the basic concept behind the Bankruptcy process as administered by the trustee, then you'll have a more clear idea.

The duty of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very dull read about 600 pages if you are serious).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is executed in a bunch of diverse ways but it mainly comes down to income and assets. The trustees role is to collect payments beyond your income threshold. The further role is to sell off any assets that can contribute to paying back your debts.

What this resembles is that yes the trustee will sell your house right? Not always. The only reason the trustee will sell any asset including your house is to get money to repay your debts. If there is no equity in your house then it's pointless to sell your home. This is happening increasingly more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not automatically reflect the price today.
A quick tip here if you have a house in Bunbury and are looking at Bankruptcy: get a skilled professional to help you through this process, there are plenty of variables in these scenarios that should be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they hope to sell your house and not take the risk? The bank that has nicely lent you the money for your house is creating good money every month in interest out of you, month in month out, so long as you keep up to date with your payments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee establishes that there is loads of equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to mark the value of your house and the quantity you owe on the house. A tip if you are attempting to work out the value of your house: use a registered valuer as this will offer you peace of mind, don't use your neighbours' gut feel advice or a real estate agents advice to get to this figure. When you get a valuer out to your property, ensure that you tell the valuer to value the property for a quick sale, make sure you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to offer two valuations: one for a quick sale and one for a well marketed non time sensitive sale. These days that's not the case, but if you meet them and let them know you need to sell your home in the next 30 days you may control the result. The idea is that you want a life-like sell now figure.

There are two reasons this valuation technique is critical to you: one you may have peace of mind ascertaining the market value of your house, and after that you can easily develop your equity position. Secondly, your home may be worth far more than you thought. Get some advice before doing this. The number of times I've met clients that have sold their family home of 20 years simply to find out I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another significant consideration is ownership, in most cases houses are bought in joint names. In other words a couple may be a house 50/50 using both incomes to make the payments. If one party declares bankruptcy and the other party does not, the equity is only factored on the 50 % of the property.

When it concerns Bankruptcy, this is just one of potentially numerous scenarios that are possible when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I need to repeat this but get some advice on this area of Bankruptcy because it is very tricky and each and every case is different.

If you really want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Experts Bunbury on 1300 795 575, or visit our website: www.bankruptcyexpertsBunbury.com.au.

Thursday, November 17, 2016

Bankruptcy in Bunbury - Who do I talk to?

Should I talk to my accountant about Bankruptcy?
The answer seems clear doesn't it: if anyone knows your financial situation well in Bunbury, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant doesn't have your best interests at heart when it comes to Bankruptcy, it's that his skills lie in helping you save you money at tax time, lowering your tax liability and lodging your BAS.

Most accounting degrees will invest very little to no time on bankruptcy, it's generally carried out as a post graduate speciality course for those who want to work in the field. Unless your accountant is an insolvency specialist, he wouldn't know that a lot about the effects of Bankruptcy, I can guarantee you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Bunbury, they have the tendency to be large firms with very nice offices who charge accordingly.

Should I consult my Solicitor about Bankruptcy?
No! You can speak with your solicitor in Bunbury but more than likely it won't do you much good. Solicitors are certainly good at undertaking things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Bunbury tend to have either a legal or accounting experience, and the reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner until you have a law or accounting degree.
Just like there are a small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay a considerable price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to help you with this, they have no hidden agendas and they're a terrific option for really helping you think through your situation when it comes to Bankruptcy. If you end up stressing out constantly, not sleeping, not eating or over-eating and thinking about money pressures all the time, then get some help.

There are also charities around Bunbury like Lifeline that offer a remarkable service. They will be a sounding board if you just need someone to discuss with you what your options are. Don't let your financial trouble destroy your life - in the end it's just money.

If you really want to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Bunbury on 1300 795 575, or visit our website: www.bankruptcyexpertsBunbury.com.au.

Monday, August 8, 2016

Bankruptcy in Bunbury - Will I lose my business if I go bankrupt?

When people in Bunbury come to me trying to talk about Bankruptcy, they are typically loaded with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it more clear. One of the most general issues is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are a manager of a business any shape or size you can keep your business if you want to. In Bunbury, businesses that are insolvent have a few options such as liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complex area so get some professional advice on this one if you have a business. Generally speaking, the debts in a business and personal debts go together when a business owner declares bankruptcy. There are a few significant implications for directors of companies when it pertains to Bankruptcy in Bunbury: A bankrupt can not be a director of a company, so if you have a pty ltd company you will likely need to retire as a director as soon as you're bankrupt.

A constraint that applies when you are generally bankrupt as a business owner is that you may be in your own business as a sole trader only. There are things you should make known as a part of that but in essence you can still run your business. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. Such as, if you run a building company, your license will be suspended once you're bankrupt and consequently you can no longer trade without that license, so make sure you are asking the appropriate questions when it comes to licenses and Bankruptcy in Bunbury.

However if your business is not impacted directly by such issues, then you'll will need to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your company, then go bankrupt and then open the doors the next day like almost nothing had happened. There are laws in place to prevent what is called phoenix companies growing out of the ashes of an old company.

Having said that, it's just an issue of speaking to the right people about Bankruptcy. In this situation you may think you need a liquidator for your business, and you might be right, but keep in mind that every liquidator is different and have their own motives. Liquidators make money from your liquidation - heaps of money - so just what advice do you think you will get?

When it comes to Bankruptcy, I think that giving generic advice in this area is likely unsafe as it can have very severe implications for directors and business owners. This is since it is one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some fundamentals however, that you may benefit from. There is no restriction to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your vendors under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the appropriate advice ... If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Bunbury on 1300 795 575, or visit our website:.bankruptcyexpertsBunbury.com.au.

Wednesday, July 6, 2016

Bankruptcy in Bunbury - Changes to help Small Business and Entrepreneurs

Do you know how much Bankruptcy Bunbury is changing? The Australian Government in late 2015 recommended some innate changes to the Bankruptcy Laws in Australia. One of the most significant of these is the length of time that a person is bankrupt for. Right now, there is a minimum amount of time that you must continue to be bankrupt, however, this 3 year period may very well be reduced down to just 12 months. So if you are inquiring about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 recommended that "the proposed changes to ease the burden of bankruptcy laws didn't go far enough and the government should adopt US-style laws to protect the family home".

These adjustments to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding family assets was important because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws discouraged investors from supporting start-ups, and therefore mentoring had been "driven out of the system".

"They naturally find it very intimidating themselves personally and with their assets at risk in a risky early-stage deal, but with their own money in the deal and a lightened-up provision I think we 'd probably see more willingness. It could be more important than the money.".

Fraudulent Behavior

The argument surrounding this Bankruptcy issue in Bunbury that some come up with is that this shift will only invite fraudulent behavior opening pandora's box so to speak for the unscrupulous to exploitation of the bankruptcy system. We have looked at the minimum, but on the other side of the problem, The government is not proposing to change the maximum term of 8 years if it deems a bankrupt has operated in an unethical or fraudulent way, and there are no recommendations to change the consequences of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As an insolvency professional in Bunbury, I have a reasonable share of knowledge when it concerns Bankruptcy. And having dealt with countless bankruptcy cases in Bunbury I have never caught someone abusing the system or acting in an immoral way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur suffer through the very complex task of bankruptcy, not once have I thought they are happy about it. The average small business owner or entrepreneur in Bunbury does not start out taking enormous financial risks with the intention to fail. The media prefers citing the apparent misuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

These proposed changes will be good for often the most effective and brightest in Bunbury not get kicked out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, companies keeping this country going.

Now there is a fine line with exactly what the government is trying to do here, since they are trying to balance helping individuals who have made decisions out of their control, and preventing people from making missteps that land them in trouble and as a result an issue of Bankruptcy. However you likewise don't want to eliminate the experience and knowledge that business owners have. You undoubtedly don't want to smash people simply because they have had a genuine failure in a large or small start-up venture that has not succeeded.

At the big end of town large established companies have long been criticised for their failure to innovate - lets face it they would be more likely to do so if the risks of bankruptcy were decreased because directors are distressed they'll be personally accountable in an insolvency arrangement if the new project doesn't work out.

The government's suggested 'safe haven' modifications for directors of companies will enable Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I can not imagine, that these variations will be damaging to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health field because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Bunbury not a day passes where I don't hear the tragic experiences of relationship failures, thoughts of suicide and the list continues.

Bankruptcy helps save lives, and it could save yours. If you need some help with your debts in Bunbury or are just considering Bankruptcy, don't hesitate to give us a call here at Bankruptcy Experts Bunbury on 1300 795 575, or visit our website:bankruptcyexpertsbunbury.com.au

Monday, July 4, 2016

Bankruptcy in Bunbury - does it matter if it is voluntary?

When it comes to Bankruptcy Bunbury, normally people aren't aware that there may be both voluntary, and involuntary bankruptcy - both have distinct methods and rules.

Involuntary bankruptcy happens when a person you owe money to involves the court to declare you bankrupt. Normally when you get one of these kinds of notices, you have actually 21 days to pay all the debt. If you do not, then the creditor returns to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documents in and after that you are bankrupt.

You can challenge a bankruptcy notice by going to court after the 21 days have expired and put your case forward, to prevent it going to the next level. Apart from the way you became bankrupt there is in fact no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're administered to in the very same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are more than likely to be made bankrupt by someone, get some help and act on that advice. Generally I've found it's always more effective to know what you can and can't do before you have someone bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

Alternatively, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for everybody of course, but basically I find that one way you could work it out is to figure out just how long it will take you to pay each of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may help you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the rate she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and fail to remember to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will remain on your file for 5 years, so for $30 you can have your credit file seriously damaged for that period of time - and all of this will impact how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unethical. The punishment doesn't seem to amount to the crime in my book. So if you actually have defaults on your credit report for 5 years, bear in mind that bankruptcy is on your credit file for a total 7 years then its rubbed out completely.

So if your credit rating is a big element in trying to decide whether to participate in a Debt Agreement or Personal Insolvency Agreement or Bankruptcy remember they will all sit on your credit file for a total of 7 years. The biggest variation is that with a DA or PIA you repay the money and still have it on your file for 7 years.


I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part most people are afraid of when they come to me to go over their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. As compared to countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government assumes the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which in turn costs the taxpayer anyway.

Bankruptcy wipes every one of your debts including ATO debts except for a few things:

·         Centrelink Debts, Court Fines like parking and speeding fines.
·         HECS or Fee Help loans.
·         Money to take care of a car accident if the car was not insured.

There is much more that can be said about this and Bankruptcy in general but the purpose of this blog was to help you decide between a few possible options. When getting some advice, don't forget that there are always options when it concerns Bankruptcy in Bunbury, so do some research, and Good luck!

If you wish to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to consult with Bankruptcy Experts Bunbury on 1300 795 575, or visit our website:bankruptcyexpertsBunbury.com.au.